1. Offer an online service that is paid for primarily through subscriptions. Specifically we exclude companies offering hosting, hardware or other infrastructure; so we exclude Amazon, Rackspace etc.

2. Are publicly traded on a major US exchange. (In future volumes we plan to include SaaS companies traded on other exchanges around the world).

3. Have at least $50m in run rate revenue as reported in their last quarterly report. We set this hurdle to eliminate companies that have a public listing but that are below what would normally be considered the revenue threshold needed for an IPO.

4. Derive the majority of their revenues from the SaaS model. See below for our definition of SaaS model revenue.

Our definition of SaaS model revenue is:

1. Subscriptions that include what would have been Licenses and Maintenance in the old model. Subscriptions can be for any time period, although we view monthly as the norm.

2. The Subscription includes hardware and the required infrastructure to run the service. This can be via an externally hosted “cloud” or via an “appliance” that runs within the customer’s data center/firewall.

The Index is dynamic. Each quarter we add new companies to the Index that meet our definition (usually because of an IPO, but may also be via a spin off or via the model transformation of an existing public company). We also delete companies that no longer meet the requirements (usually because they have been acquired by a company that does not meet the requirements).